THE MONEY MARKET.

Auckland Star, Volume LX, Issue 39, 15 February 1929, Page 4

THE MONEY MARKET.

BANK CHARGES. DISCOUNTS AND OVERDRAFTS. FALLING INTEREST RATES. That a return to prosperity may have been delayed by the slowness of the banks to adjust their rates of interest with the advent of more favourable trade conditions was the opinion espret-ssd by the president of the Auckland Chamber of Commerce in his address at yesterday's annual meeting. "'Doubtless," said Mr. Merritt, "the delay was influenced by political considerations, but more probably by the reluctance of the Australian banks to fall into line. Hie influence of prevailing rates in Australia over New Zealand ie much more profound than most people imagine. It is pleasing to note that the banking returns continue to indicate a very healthy position and a further reduction in the rate of interest cannot be long delayed. It cannot come too 6oon. "In this connection, prior to 1923 the rate for discounting was always V& per cent lower than overdraft rate. We trust this fact will not be lost sight of wheu the next adjustment in interest rates is made. Rates of interest generally appear to be falling, and this fact should not be lost eight of to those contemplating long term mortgages. "The high rates of interest which have prevailed since 1914 are largely accounted for by the increased demand on capital for the unproductive purposes of war, together with the increased demand due to the war time destruction of capital and the consequent necessity for reconstruction. The shortage thus created has been reflected in higher interest rates. Happily this shortage is gradually passing and a slow but steady fall in interest rates can be looked forward to."